MORNING BRIEFING: FX Eyed, Polish Retail to Hint at Rate Moves

Trading in regional currencies may be volatile Friday because of mounting concern Greece may exit the euro zone.

After losing ground earlier in the week, the Czech koruna and Polish zloty appreciated roughly 0.5% versus the euro Thursday, while the forint firmed almost 0.8%.

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Poland’s statistics office will release retail sales and unemployment data for April.
Should retail sales surprise on the upside, beating the 9.3% annual growth rate forecast in a Dow Jones Newswires poll, concern of further interest rate increases may be rekindled, and bond prices would likely move lower, traders said.

Earlier this month, the Polish labor ministry released a preliminary unemployment estimate of 13% for April. Barring a significant revision, this set of data is unlikely to impact markets.

OTHER NEWS

POLAND: Poland’s monetary policy council could raise interest rates again if upcoming inflation projection suggests it is unlikely inflation will return to the central bank’s 2.5% target, rate setter Jerzy Hausner said Thursday.

POLAND: Polish union members took to the streets of the capital Thursday in the latest protests against a new law that will gradually raise the retirement age to 67.

SLOVAKIA: Slovakia’s left-of-center majority government said Thursday it would raise corporate tax from 19% to 23% as of next year in a bid to trim the public deficit to comply with euro-zone rules.

HUNGARY: Hungary’s forint could lose about 7% of its value against the euro within as little as three months unless the country secures a loan from the International Monetary Fund and European Union, reassuring investors the economy can withstand shocks from the euro-zone crisis, analysts said.

HUNGARY: Hungary’s Prime Minister Viktor Orban proposed a package of measures designed to spur growth in central Europe during his talks with European leaders in Brussels, Hungary state news agency MTI reported.
ROMANIA: Romania’s new Prime Minister Victor Ponta on Thursday sacked a top official he had just appointed after he was accused of interfering in a graft case against a prominent party member.

BULGARIA: Bulgaria’s Kozloduy nuclear power plant announced Thursday it had switched one of its reactors back on to the electricity grid, after a month of refuelling and repairs.

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Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.